Tariff Uncertainty Helps Drive Down Berkshire Hathaway Profits

Shares in Berkshire Hathaway fell more than 3% Monday (Aug. 4) after the firm revealed a drop in quarterly profits.

That disclosure had come Saturday (Aug. 2) with the Warren Buffet-led firm’s earnings report, which also included a $3.8 billion write-down in Berkshire’s 27.4% stake in Kraft Heinz, Reuters reported. The report adds this write down as a second for the company, reflecting a major decline in the value of the investment.

According to the report, Berkshire had taken a $3 billion write-down in Kraft Heinz in 2019 and remains the largest shareholder of the food and beverage firm.

Berkshire Hathaway also reported a 4% dip in operating income, down from $11.6 billion the year earlier, as underwriting premiums declined and trade policy uncertainties impacted most of Berkshire’s consumer businesses, dealing with delayed orders and shipments.

The Omaha, Nebraska-based company, which has not repurchased any shares since May 2024, said it remains cautious about market valuations amid continued uncertainty regarding tariffs and economic growth, the report added.

“The investment vehicle has stopped building up its cash pile, to end a run of eleven straight quarters that began in the third quarter of 2022 and doubled the amount of liquidity available,” Russ Mould, investment director at AJ Bell, told Reuters.

Reuters also pointed out that Kraft Heinz, ranked eighth in Berkshire’s portfolio by market value, has struggled more than other food industry competitors as more consumers seek out healthier options and private-label products.

That trend has been underway at least since last year, as PYMNTS has written. In an interview here earlier this year Shekar Raman, CEO and co-founder of Birdzi, said the rise in private-label brands is down to several factors.

“Major retailers have aggressively expanded their private-label assortments,” Raman said. “Beyond the budget-friendly items shoppers expect, retailers have tapped into premium, organic and specialty segments. At the same time, economic pressures and inflation have pushed shoppers to find creative ways to cut costs, making private-label products an increasingly attractive choice.”

Buffet is due to retire at the end of the year as CEO of Berkshire Hathaway, ending one of the “longest, most closely watched tenures in corporate America,” as PYMNTS wrote.

“The 94-year-old investor’s decision, disclosed May 3, set off a flood of tributes, along with fresh nostalgia for his simple, common sense approach to investing and economics and his blunt scrutiny of how Washington’s policy mix shapes long-term value creation.”